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AWS Case Study: NASDAQ OMX

Created by: Malik Amani

Modified on: Fri, 21 Sep, 2018 at 10:25 AM

About NASDAQ OMX

NASDAQ OMX is the largest exchange company in the world and currently owns and operates 24 markets, three clearing houses and five central securities spanning six continents. The Global Data Products division focuses on creating innovative products for institutional retail and individual investor customers.

The Challenge

The division launched their Market Replay product a few years ago to allow customers to quickly access historical stock price information. According to Jeff Kimsey, Associate Vice President of Product Management for NASDAQ OMX Global Data Products, “Market Replay allows users to replay the stock market, down to the millisecond, to see top of book quote and trade prices at any point in time so they can find the exact piece of information they want.”

Customers use Market Replay on the trade support desk to validate client questions; compliance officers use it to validate execution requirements and rate National Market System (NMS) compliance; and traders and brokers use it to look at certain points in time to view missed opportunities or, potentially, unforeseen events.

The division also launched their Data-On-Demand product a little over a year ago in response to customer demand. “Data-On-Demand allows customers to access underlying Market Replay files stored on Amazon through an API,” states Kimsey.

Customers use Data-On-Demand (powered by Xignite) to lower their costs of storing and consuming top of book (Level 1) data; they can validate historical data for compliance or legal purposes without the commitment and technology of storing and retrieving large data sets locally; Quant/Algo firms use the data for the back-testing of trading algorithms. Data-On-Demand also acts as an outsourced, back-up solution for Level 1 data, significantly reducing costs for storing this information internally. Lastly, firms can simplify bulk data and growth impediments to data infrastructure while increasing technical transparency.

Kimsey describes the division’s goal before signing on with Amazon Web Services (AWS): “Our goal was to support a growing customer base without worrying about infrastructure, security, or performance.”

Why Amazon Web Services

Kimsey explains why NASDAQ OMX chose AWS to power Market Replay: “The major advantages of cloud computing are cost and time-to-market. By leveraging the infrastructure created by AWS, we avoided the need to buy expensive hardware and were able to decrease our time to market threefold.”

When reviewing possible solutions, Kimsey and his team considered in-house storage, but, “it just did not seem to fit,” says Kimsey. He adds, “We wanted to increase the storage and continue to store information indefinitely. We asked ourselves, ‘How are we going to support ten years of historical tick data down to the millisecond? Do we really want to support that in-house?’ So when AWS came out with Amazon Simple Storage Service (Amazon S3), it provided an answer to us for utilizing an infrastructure that was already in place.”

The team saw that Amazon S3 would enable them to deliver hundreds of thousands of small files per day to AWS, and then back to the customer ¬in seconds - an ideal solution at a low cost.

“When considering AWS, we were able to go immediately to senior executives and sell the idea of a low-cost solution by giving them evidence,” notes Kimsey. “The solution cost $50 the first month, and that resonated very much with senior management. Thus, we were able to accelerate the product launch.”

The Benefits

Kimsey says, “Our use of AWS was really a perfect storm of technology coming together with customer need. AWS allowed us to store information in a cost effective manner while alleviating the burden of supporting the necessary infrastructure since AWS takes care of that. It really is a win-win for us and our customers.”

Two of the major advantages of cloud computing for the team are time-to-market and cost. Agility is also key. Kimsey says, “The agility of Market Replay was born using the Amazon S3 solution.”

The team is also pleased with the flexibility that Amazon S3 offers. Kimsey explains, “With AWS you can add more data as you go. However, if you are not sure that the product is going to resonate with customers, you have a low cost solution, which mitigates the risk of creating new products.”

Looking ahead, Kimsey sees possibilities for future uses of AWS. He comments, “We have dipped our toe in the water with Market Replay, and Data-on-Demand. I think there is a lot more that we could potentially do, but we are trying to understand how we can add value for our customers. Regardless of the direction we go, we know that AWS offers us a powerful application with quick time-to-market at a low cost.”